Tony Abbott MHR

IN PRAISE OF BOSSES (AND THE JOBS THEY BRING)

Neville Wran, the most successful Labor leader of recent times, once said that his government had three objectives: jobs, jobs and jobs. That’s actually not a bad description of the Howard Government’s policy aims and, thus far at least, not a bad yard-stick for the Howard Government’s economic achievements.

Since 1996, a freer and fairer workplace relations framework has produced more jobs, higher pay and fewer strikes. There are nearly one million new jobs since March 1996, average weekly full-time earnings are up 12 per cent in real terms and strikes are at the lowest level since records were first kept in 1913. In 1981, there were 797 working days lost per 1000 employees. Last year, there were just 50 working days lost per 1000 employees. To put it another way, in 1981, on average, every worker was on a strike for nearly a day a year. Now, only one worker in 20 is on strike for a day a year.

Everyone is in favour of more jobs but not everyone is in favour of policies that will actually create them. Australians like jobs but are sometimes less keen on the people who make them happen. We want more employment but aren’t always so sure about the value of employers.

Suspicion of employers did not begin with the high-profile business disasters of the past 12 months. According to a 2000 Morgan Poll, just 17 per of Australians rated business executives highly for ethics and honesty. Business executives and company directors rated below nurses, doctors, teachers, judges, clergy, academics, accountants, lawyers and bank managers for ethics and honesty (but above, it should be said, their habitual critics: talk-back radio announcers, journalists, members of parliament and union leaders).

Whichever way you look at these figures, it seems that the employers who create the jobs to pay the salaries to keep most Australian families solvent get little positive recognition. Although many employers are pursuing no more than "enlightened self interest", it’s worth re-affirming their critical importance to the economy and to society, if only because without them 7 million employees would need to find something else to do. Policy makers need to be careful about over-burdening employers with ever-increasing regulation lest, sooner or later, we kill the goose that lays the golden egg.

The risk Liberal workplace ministers sometimes run is sounding like defenders of employers right or wrong (just as Labor ministers typically sound like apologists for the ACTU). On becoming Minister for Workplace Relations last year, I resolved to be, as far as humanly possible, minister for shopfloor workers as much as for the people who employ them or the officialdom of industrial organisations. This reflected a view that workers and managers in the same business should be on the same team with a common interest in the success of their shared enterprise. Despite the best efforts of the media and parts of the union movement (both of which get more out of conflict than harmony), it is not anti-worker to be pro-boss.

Thirteen years after the fall of the Berlin Wall, many Australians are still conditioned to see labour and capital as antagonists in the class war rather than partners in a common enterprise. Good managers understand that loyal, skilled staff are about the best asset any business has. Good mangers understand that shedding staff to boost profits, Al Dunlap-style, is usually a case of short-termism run rampant. Even so, where employers are concerned, the public has a tendency to lump the good with the bad in ways we don’t with doctors, police and clergy and which is ultimately counter-productive for society as a whole.

This Government has tried to give employers a fair go, not because we see them through rose coloured glasses but because, in the end, that’s usually what’s best for most workers. We want to change the unfair dismissal law, not because we think workers should be liable to capricious sacking but because a few hard cases do not justify this handbrake on small businesses’ ability to create new jobs. We want secret ballots before strikes, not because we want to disempower workers but because we oppose union officials using them as reluctant pawns in political campaigns. We want the Industrial Commission to have more power to order cooling off periods during strikes and lock-outs, not because we want judges micro-managing workplaces but because some disputes need a circuit-breaker, especially when third parties are being hurt. We’re against compulsory union levies, not because unions should lack the standard capacity to charge a reasonable fee for a genuine service but because making workers pay for something they didn’t request and don’t necessarily need is a scam.

Today I want to focus on three areas – unfair dismissal, the judicial extension of rights to strike, and the new concept of vicarious criminal liability for workplace accidents – where extending workers’ rights at the ostensible expense of the boss can turn out to be extending some workers rights at the expense of other workers.

The Government has been criticised for the claim that exempting small business from the unfair dismissal regime could create 50,000 jobs. This ballpark projection of what might happen if just one small business in 20 took on one extra employee as a result of unfair dismissal change is no more assumption-dependent than many economic forecasts.

A recent Certified Practising Accountant Association survey showed that 45 per cent of small business didn’t think they understood unfair dismissal laws and, more worrying, 76 per cent of accountants didn’t think their small business clients understood the law. Thirty per cent of small businesses thought that employers always lost unfair dismissal cases and 27 per cent thought staff couldn’t be dismissed even if they were caught stealing.

Despite the Government’s previous unfair dismissal reforms, there are still enough horror stories around to justify small businesses’ nightmares. Consider some real life examples of unfair dismissal actions culled from the records of Australia’s industrial commissions:

• An employee was terminated for sexual harassment after repeatedly calling a female fellow-employee an "expletive-deleted slut" during a training course. The Commission ordered reinstatement and compensation for lost income because, it said, the words were of "general abuse" and did not have any particular sexual connotation.
• An employee was terminated for preparing and distributing defamatory and sexist material about a female manager during working hours after three previous warnings. The Commission ordered reinstatement and compensation for lost earnings because, it said, this did not breach a fundamental duty of good faith and had been done in the employee’s capacity as union delegate.
• An employee was terminated after repeatedly referring to a manager as a "scab". The Commission ordered reinstatement because, it said, "it also needs to be remembered that in the eyes of the applicant, the manager was a scab as were other managers".

The public never learns about some of the most vexatious unfair dismissal applications. They’re usually settled before reaching hearing because employers decide that paying what’s indelicately referred to as "piss-off" money is less expensive in time and legal costs than defending even a clear case.

In the absence of unfair dismissal laws, there will always be a few dismissal cases which seem harsh. Even so, as they stand, these laws are a classic case of a cure which is worse than the disease.

Each of the "strategic strikes", which has brought the motor industry to the brink of standstill three times in the past 12 months, involved breaches of workplace law. In its closing stages, the strike at Tristar in Sydney was in breach of a section 127 return to work order. The strike at Walkers in Adelaide was at all times unprotected industrial action in breach of section 170MN of the Workplace Relations Act. And the BHP Westernport strike only settled after the Victorian police finally cleared illegal pickets.

Sanctions which are not enforced tend to atrophy. Rights which are regularly exploited tend to expand. Responsibilities which are widely shirked tend to disappear. Small numbers of union officials regularly flout the law and larger numbers of union lawyers, like tax minimisers, are always on the lookout for loopholes in the law.

A series of judicial decisions has blurred the legislative distinction between protected and unprotected industrial action. Despite Justice Munro’s decision in the Campaign 2000 case, one-size-fits-all industry-wide pattern bargaining is making a strong comeback in the manufacturing and construction industries. The Federal Court’s Emwest decision permits protected action during the life of a certified agreement over any matter not covered by it. And the recent Electrolux decision allows protected action within a bargaining period over anything a union genuinely wants (and not just matters pertaining to the employment relationship).

The Government is seeking to appeal the Emwest and Electrolux decisions and to enshrine the "Munro doctrine" in legislation through the Genuine Bargaining Bill now before the parliament. In trying to preserve the original distinction between protected and unprotected industrial action, the Government is not protecting employers so much as ensuring that traditional forms of employment can survive in a competitive, globalised economy.

For all their good intentions, the die-in-a-ditch defenders of the way things were have done more harm than good. The award system has changed despite them and traditional jobs have evolved into something else because of them. Tight controls over who, how and when people could work under traditional industrial awards have driven the move towards enterprise and individual agreements over the past decade. The percentage of the workforce whose employment is governed by awards has dropped from three quarters to a fifth. About 50 per cent of employment is now largely based on individual contracts. Over 10 per cent of collective agreements are made with workers rather than with unions representing them. Over-prescriptive regulation has played its part in driving casual employment from 15 to nearly 30 per cent of the workforce and self-employment from a few hundred thousand to about 2 million in just two decades.

Making it harder for businesses to have permanent employees means fewer employers and fewer jobs. Paradoxically enough, by trying to make traditional employment less regulated and more competitive with casual employment and self-employment, the Howard Government is making large, unionised businesses (and the jobs they provide) less vulnerable in an era when almost anything can be sourced overseas.

Policy makers with a predilection for legislative and judicial solutions usually under-estimate the capacity and goodwill of Australian managers and workers to sort things out for themselves. Higher levels of education, an alert media, and more cooperative workplace cultures mean that regulatory prescription is generally less necessary than ever before. In an age when labels and stereotypes make less sense than ever, concern to protect the vulnerable can easily produce regulatory overkill.

A decent and humane society can never take workplace safety for granted. A single workplace death is one too many. Even so, policy-makers need to be wary lest regulatory proposals are about "making a statement" more than making a difference.

Between 1996 and 2001, the number of workplace deaths a year has dropped from 279 to 206 nationwide. In Victoria, workplace deaths have fallen from 102 in 1988 to 31 last year. In a historic breakthrough, all Australian Governments have just committed themselves to specific targets of a consistent 20 per cent reduction in workplace deaths and 40 per cent reduction in workplace injuries within a decade.

All Australian jurisdictions have heavy penalties against breaches of occupational health and safety rules. NSW, for instance, provides a maximum penalty of $550,000 (with up to two years imprisonment for subsequent breaches). Under legislation introduced this year the federal Government is proposing criminal fines of up to $495,000 for individuals and entities causing death or serious injury.

All jurisdictions currently provide for criminal convictions against companies and their officers when workers are exposed to extreme danger. Although criminal negligence in respect of workplace safety is not easy to prove, the sanctions regime is far from legislative window-dressing. In Victoria, a company has been convicted of manslaughter under the Crimes Act and a director has been convicted under the safety laws because he failed to have the brakes repaired on a truck subsequently involved in a fatal accident. Esso was fined $2 million after the 1998 Longford explosion. Under federal legislation, ADI has faced separate fines of $75,000, $130,000, $85,000 and $160,000 over the past five years arising from injuries at its plants.

So called "industrial manslaughter" laws as proposed in Victoria and hinted at in Queensland go much further. As proposed in Victoria, "industrial manslaughter" means that senior executives could be found guilty of criminal offences even where they were not personally responsible for the criminal conduct. Under the Victorian version, blocked in the state upper house, executives could be convicted of industrial crimes if they are responsible for the relevant part of the organisation and should have known that the conduct or omission in question involved a high risk of death or serious injury.

The difference between the existing crime of manslaughter in a workplace context and "industrial manslaughter" as proposed is that direct personal involvement is not necessary for a conviction. As the explanatory memorandum to the Victorian bill puts it, it’s a matter of "derivative rather than direct liability". If for argument’s sake, a worker was killed after climbing a tower without a safety harness, the business would not only face an existing potential liability for failing to establish a safe system of work but the chief executive could face a criminal fine and gaol term even if he had no personal role in preparing, equipping and supervising the dead worker.

On top of corporate fines of up to $5 million, the Victorian Government’s industrial manslaughter bill proposed fines of $180,000 and five years imprisonment for executives whose organisations have committed industrial manslaughter as well as $120,000 fines and two years gaol for executives where corporate gross negligence has led to serious injury.

There are three essential problems with industrial manslaughter legislation as proposed: first, it treats workers like children by failing to recognise that workplace safety is a shared responsibility between employers and employees; second, it shifts the workplace safety emphasis from prevention to punishment; and third, it introduces a new type of vicarious liability into the criminal law.

Workplace safety is generally managed according to a hierarchy of responses ranging from workplace inspections and improvement notices, through orders and injunctions to civil and criminal penalties depending on the nature of the breach of the employer’s duty of care. Except with serial offenders, the initial emphasis is on consultation, co-operation and dialogue. Under a more punitive regime, businesses are likely to call their lawyers straight after the ambulance and concentrate on avoiding blame as much as avoiding injury.

The "industrial manslaughter" mindset casts the employer as habitual villain. As a society, we need to demonstrate our abhorrence of slip-shod safety procedures and industrial short-cuts but we should also beware of the tendency to be wise after the event and seek scapegoats rather than solutions. One workplace commentator likens industrial manslaughter to convicting passengers of culpable driving. It’s not inconceivable, say employer groups, if a drunken fork-lift driver seriously injured fellow employees, that the boss could be guilty of a criminal offence while the company could not sack the worker at fault.

Evidence presented to the Construction Industry Royal Commission suggests that workplace safety is sometimes manipulated to settle industrial scores. It’s hard to avoid the suspicion that laws which potentially criminalise senior management for their subordinates’ errors could become a powerful weapon in the hands of unscrupulous workplace warriors.

Society rightly places heavy responsibilities on employers. They have to pay their workers in accordance with all relevant workplace instruments, arrange employees’ group tax and superannuation contributions, collect GST, deal with three levels of government over environmental and OHS regulations and abide by sometimes bewilderingly complex tax and financial regulation.

As well as the corporate and industrial risks which have always been part of a market-based economy, employers run the gauntlet of unfair dismissal actions, harassment cases, discrimination law, and workers compensation claims. From an employer’s perspective, it sometimes seems easier to get divorced than to separate from staff with whom there is no further relationship. Even when they are wrong, these perceptions can badly damage Australians’ employment prospects. It’s not normally illegal to make an honest mistake but any high-profile employer can expect public humiliation if things go wrong.

Even those who don’t much like the profit motive or wealth accumulation should concede that employers are indispensable if not always admirable. Few employers deserve a medal but most deserve more recognition than they get. Everyone who wants more jobs and lasting benefits for workers needs to accept that this means a fair go for employers and employees alike.